January is in the record books and it was a big one for the TSP stock funds!  The C fund (S&P500) posted its BEST January in 32 years!  This following the WORST December since The Great Depression (1931)…  How can anyone make heads or tails of this market??  

My goal is to be in the stock funds when market risk is lowest.  Ideally I want to buy the stock funds at the beginning of a new identifiable up trend.  Alternatively, I would buy into the stock funds following support at major resistance levels.  The market has gone straight up since bottoming out in late December.  Without a pull back there is not a tradable trend but, we are approaching a major resistance level.  IF the C fund can stabilize above the 50WMA, I would look to get back into the stock funds.  

Long Term

This will be the first test of the 50WMA since the market collapsed in December.  I expect the market to roll over but you never know…

Short Term

In the short term, all three TSP stock funds are in a similar position.  All found support last week at their respective 50DMAs and are within a few percent of their 200DMA.   The market has come a long way very quickly since the December bottom.  I would not expect much upside beyond the 200DMA without a significant pull back.  Volatility has decreased significantly in January.  I expect high volatility to return over the next few weeks…  Stay tuned.

Have a great week!